Author: Sam Bourgi
Compilation: TechFlow
TechFlow Introduction: NVIDIA's plan to issue at least $20 billion in bonds lends further credibility to the intense demand for AI infrastructure. The connection to the crypto world lies in the fact that a number of Bitcoin miners are repurposing their idle power capacity and facilities into AI data centers. Companies like HIVE, TeraWulf, Hut 8, and CleanSpark are all pivoting in this direction, driven by the underlying pressure that the mining business is becoming increasingly less profitable, a situation exacerbated post the 2024 halving. This short report pieces together this industry subplot.
Chipmaker NVIDIA has reportedly joined the AI bond issuance wave, planning to sell $20 billion in bonds. This fundraising move underscores the robust market demand for AI infrastructure and data centers, opening a new door for Bitcoin miners seeking to move beyond their crypto-centric operations.
On Monday, Bloomberg reported that NVIDIA intends to raise at least $20 billion through a multi-tranche bond offering to fund AI-related investments and repay existing debt.
The report, citing sources familiar with the matter, stated that NVIDIA plans to issue bonds across seven different maturities, ranging from 2-year to 30-year terms. The yield on the longest-dated bonds is expected to be about 0.9 percentage points higher than comparable U.S. Treasuries.
This bond issuance indicates that investors still have an appetite for funding AI expansion and that one of the most influential companies in the industry believes the demand for AI infrastructure will remain elevated.
Source Cointelegraph
NVIDIA is the leading supplier of GPUs powering large language models, sitting at the heart of the entire AI ecosystem. Its chips are heavily adopted by major hyperscale cloud providers and cloud service providers, making its capital expenditure plans a closely watched barometer for the industry.
This ongoing wave of AI construction is also benefiting a growing number of Bitcoin miners. These miners are beginning to convert their power-hungry facilities and electrical infrastructure into sites for high-performance computing and AI hosting.
Companies like HIVE Digital, TeraWulf, Hut 8, and CleanSpark, which previously relied almost solely on Bitcoin mining revenue, are now rebranding themselves as providers of data center computing power. They are leveraging their existing infrastructure and power agreements to capture the benefits of rising demand for computing resources.
Profit Margins in the Mining Business Continue to Be Squeezed
The reason miners are scrambling to pivot to AI is that the economic viability of their core crypto business is becoming increasingly difficult, a situation made particularly clear after the halving in April 2024. The halving, combined with persistently high mining difficulty and operational costs, has severely compressed profit margins.
Some analysts have described this period as the "most brutal profit environment ever." As a result, many miners have started selling portions of their Bitcoin inventories, reducing leverage, and seeking new revenue sources beyond mining.
According to data from TheEnergyMag, between October last year and March this year, Bitcoin miners collectively sold over 15,000 BTC.
Caption: Miners' inventory sell-offs accelerated after BTC surged past $126,000 last October.
Source TheEnergyMag
Against this backdrop, analysts expect large mining firms to gradually transform into AI infrastructure providers. For instance, Bernstein recently stated that it believes the vast majority of IREN's future value will come from AI infrastructure, citing the company's rapid growth in its cloud AI business.
